AIG settles fraud lawsuit, to pay $725 Million

[lothar]

Much of what Goldman was paid didn't stay at Goldman, it went to other parties, including hedge and pension funds.

A hedge contract, such as those written by AIG, have multiple "counterparties", whereby one person pays another in a chain. Goldman wasn't the final counterparty in many of the contracts.

You should read The Big Short by Michael Lewis, he explains it pretty well for laymen.

The only problem I have with Goldman is, more than any other finance company, they seem to have their people everywhere pulling important strings.
How is it that all these people working for the government's most important positions are all former Goldman Sachs alum?
Why not from Citigroup, JP Morgan, Bank of America, Morgan Stanley, Wells Fargo, or even smaller banks?
Goldman seems to have their hands everywhere, more so than any other financial institution. I don't even see that with any of the other "big 5" Wall St banks I listed above.

If it looks like a duck and it quacks like a duck, then it is a duck.

That book is on my reading list. Just haven't had time to read books the past 6 months.